Faculty of Management Sciences

Ester Kalipi
(M.LSCM.; B. Hons Logistics; B-tech. BA.; Dip. BA.; Cert. BA.)

OTM611S

2. Ownership and Organisation

18 February 2018
 Table of contents
 Objectives of the unit
 Types of business ownership
 Organization and structure of a transport company and
industry
 Management Functions and Policy formulation
 References
 Objectives of the Lesson
By the end of this unit, students should be able to:
 List and explain types of business ownership
 Discuss the Organisational structure of the transport
company and industry
 Explain the management functions and policy
 Ownership and Organization
Factors that determines the forms of ownership include:
 The nature of the business
 The type
 The extent of international and national regulations of the industry
 Technology of the particular transport mode
 Capital requirements to service the company and
 Extent of the government or political control
 Types of Business Ownership
• Sole trader
• The partnership
• The limited company
• Co-operatives
• Public Authorities
• Department of State
• The municipality
• Public corporation
 Sole Trader
• Both a manager and the owner of the business.
• Sole proprietor – single person provide the start-up capital
• Owner account for the risks and responsibility of any loss in the
business
• Entire business profit belongs to him
• Fully responsible for the management of business, though he can
employ people to carry out business tasks
• It is difficult to ascertain the true costs of operation
 The Partnership
• Two or more people join together to form a company
• Share of profits is distributed proportional based on the envolvement
in the company.
• Legal arrangement through a partnership agreement may details the
portion a member should be remunerated and lays out the liability of
any debts.
• Provision of good customer service
• Good working relationship with staff
• This form of ownership is not common in the transport industry.
 Limited Company
• Capital to start a business is provided by the shareholders and their liability
for debts of business is limited to the amounts paid, limited liability company.
• Business assets are purchased with money from shares
• Private Limited company and public limited company
• Private limited company is common in the transport industry.
• It has at least 2 shareholders but not more than 50
• At least one director & one secretary who do not own the shares
• They are not listed on stock exchange, they cannot invite the public to buy the shares
• Public limited company is formed by 7 people & shareholders are
unrestricted.
• At least two directors and company secretary
• Shares can be sold to the public at large through stock exchange
 Limited Company (Cont’d..)
Memorandum of association Articles of association
• Name of the company • Internal organizations
• The registered office • Structure and method of management
• Objectives of the company of company
• Amount of authorized share capital • Details of transferring shares
• Company is not allowed to go • Meeting of the shareholders (when)
beyond the provisions stipulated in • How voting will take place
the objectives clause
 Co-operatives
• Voluntary association of economic units which enables the members to
improve their economic situation through joint ventures while maintaining &
protecting the independence of the individual in a competitive environment.
• Based on equality of treatment and conducting joint objectives
• Owned as a permanent business ventures by the members
• Rarely involve excessive risk because it becomes unattractive to many
members who do not like speculation.
• Self-help organizations, not cartels
 Public Authorities
• Statutory organizations set as independent bodies by the state.
• Daily activities are not controlled by the state
• They are formed to provide service to the public
• Capital is fixed interest stock loan
• Interest is paid according to the act of parliament
• Government appoints trustees
• Trustees chooses the board of control which apply management
according to the power set by the act of parliament
 Department of state
• Responsibility of running a business is vested in the minister &
employees are civil servants.
• Decisions reflects the ministerial responsibility and not commercial
acts
 The municipality
• Management is controlled by the local authority through a committee
• Organization is run for the benefits of those living in the local
authority area
• Capital is supplied by loans
• Any surplus of profit stays in the general revenue account of the local
authority
 Public Corporation
• Set by the act of parliament
• Act set responsibilities and rights of the management
• All shares are held by the government
• Prevent the integration of transport services into larger companies that may take
advantage of scale in the era of scarcity resources
• Created to avoid competition in the allocation of scarce resources
• Common ownership yield benefits to many parts of community suffered from
poor transport provision and spread the costs among low and high costs areas
• Transport is a public utility to be enjoyed equally by the whole population
• Government is the source of funds.
• Flexibility in managing day-to-day activities like a private company
• Accountable in performance to parliament through a relevant minister.
 Structure of the Transport Industry
a) Legislation of the transport sector
• Government legislation has moulded the structure and organization of the transport
industry
• Legislation are passed by the parliament, setting out main structural framework for
transport industry.
• The modes of transportation require some assistance from the government in terms of
setting up the infrastructure and operations
Effects of legislation
 Provide an efficient, adequate, economical and properly integrated system of
transport.
 Transport in important to national economy, hence central ownership and direction,
guaranteeing efficient operation is essential
 Ownership, structure and policy objectives of transport undertakings are affected
fundamentally by political processes and government legislation.
Legislation in the Namibian Transport Sector
Namibian
Ports
Roads Authority Civil
Authority Act, 2 of Aviation
Act 17, 1994 Act 6 of
1999 2016
Road Fund
Namibia Water
Administration
Corporation Act 12
Act 18 of 1999
of 1997

Motor Vehicle Accident TransNamib Holding

Fund Act 10 of 2007 Company Act 28 of
Namibian 1998
Transport Sector
legislation
Explosive Act
Road Contractor
26 of 1956
Company Act 14 of 1999

National Road
Safety Act, 9 of SARA
1972. Standards

Road Traffic and Petroleum

Transport Act 22 Products and
of 1999 Labour Energy Act,
Act, 11 13 of 1990
of 2009
 Legislation of Namibian transport industry
1. Namibian Ports Authority Act, No. 2 of 1994
To provide for the establishment of the Namibian Ports Authority to undertake the
management and control of ports and lighthouses in Namibia and the provision of
facilities and services related thereto; and to provide for matters incidental thereto.
FUNCTIONS, POWERS AND DUTIES OF THE AUTHORITY
Without prejudice (bias) to the generality of the provisions of section 3, the Authority
shall have the capacity
(a) to undertake the berthing and dry-docking of ships;
(b) to undertake the storing, warehousing, sorting, weighing, loading, off-loading,
and handling of goods and the embarking or disembarking of passengers on or
from ships within the Authority's area of jurisdiction;
(c) to operate, or construct and operate, lighthouses, and to provide and maintain
other aids to navigation, whether within a port or within the territorial waters of
Namibia or along the coast of Namibia;
 Legislation of Namibian transport industry (Cont’d..)
2. Civil Aviation Act 6 of 2016 brought into force on 1 November 2016
To consolidate the laws relating to civil aviation and civil aviation offences;
 To provide for the powers and functions of the Minister in relation to civil aviation;
 To establish the Namibia Civil Aviation Authority and to provide for its powers and
functions; To establish the Air Navigation Services in the Authority;
 To provide for a civil aviation regulatory and control framework for maintaining, enhancing
and promoting the safety and security of civil aviation for ensuring the implementation of
international aviation agreements;
 To establish the Directorate of Aircraft Accident and Incident Investigations and to provide
for its powers and functions;
 To provide for the establishment of Namibia Register of Aircraft and the Civil Aviation
Registry;
 To repeal the laws relating to civil aviation and civil aviation offences; and
 To provide for incidental matters.
 Legislation of Namibian transport industry (Cont’d..)
3. National Transport Services Holding Company Act 28 of 1998
To provide for the incorporation of a holding company to undertake, either by itself or
through any subsidiary company, transport services in Namibia or elsewhere; and to provide
for matters incidental thereto.
• TransNamib’s rail safety management system is governed by the Rail Safety Authority
which regulates train operations in Namibia. The system is obliged to ensure compliance
with the following legislation:
• Labour Act, 11 of 2009
• Petroleum Products and Energy Act, 1990 (13 of 1990)
• Explosive Act 1956 (26 of 1956)
• National Railway Regulatory Act of the RSA (16 of 2002) regarding cross-border
operations in conjunction with Transnet.
• SARA Standard; TransNamib Rules and Regulations, Rail Safety Authority & Policy, Road
Traffic Act.
 Legislation of Namibian transport industry (Cont’d..)
4. Road Traffic and Transport Act 22 of 1999
To provide for the establishment of the Transportation Commission of Namibia; for the control of traffic on public
roads, the licensing of drivers, the registration and licensing of vehicles, the control and regulation of road transport
across Namibia’ s borders; and for matters incidental thereto.
  National Road Safety Act, 9 of 1972.
 Carryout research in relation to road safety; Collection and dissemination of road safety information; Provide road safety guidance
through seminars, congresses or any other means deemed fit by Council; Assist the Minister in coordinating accident and injury
prevention measures; At the request of the Minister, enquire into any mater falling within the ambit of the Act, and report thereon;
Perform any other task falling within the objectives of the Act; Make recommendations to the Minister on road safety.
 Roads Authority Act, No. 17, 1999
 To establish a Roads Authority to manage the national road network of Namibia; and to provide for matters incidental thereto.
 Road Fund Administration Act 18 of 1999
 To establish a Road Fund Administration to manage a road user charging system; to establish a Road Fund; and to provide for
matters incidental thereto.
 Motor Vehicle Accident Fund Act 10 of 2007
 To provide for the establishment, administration and management of the Motor Vehicle Accident Fund as an administrative body to
provide assistance and benefits to persons injured in motor vehicle accidents and to dependents of persons killed in such accidents;
and to provide for incidental matters.
 Road Contractor Company Act 14 of 1999
 To provide for the incorporation of a company to undertake roads construction or maintenance; and to provide for matters incidental
thereto.
 Legislation of Namibian transport industry (Cont’d..)
5. Namibia Water Corporation Act 12 of 1997
To establish the Namibia Water Corporation Limited; to regulate its powers,
duties and functions; to provide for a more efficient use and control of water
resources; and to provide for incidental matters.
• Namibia is still in the process of drafting the energy regulatory act, to control
the flow of gas and petroleum products though the pipeline transportation.
 b) Transport organization
i. Organization as an entity, e.g. transport company

• Composed of people

• Have a distinct purpose

• Degree of structure
 b) Transport organization
ii. Organization as a process: structuring of work, systems and
people.
• Divide work among people
• Specifying business objectives
• Determine the activities and making decisions to accomplish them.
Three schools of organization as a process
a) Classical school
b) Behaviour School
c) The System School
 b) Transport organization (Cont’d..)
a) Classical school set by F. Tylor
 Activities of carrying out company objectives must be set
 Activities must be arranged in groups, which could be managed by one person
 Groups are joined with other groups within the organization in a hierarchy of importance to form the
structure of the company.
 Human resources are allocated into the structure according to their skills and capabilities
Principles of classical theory:
 Specialization of managers: an individual should have a capability performing a particular function to settle at
a particular job.
 Definition: clear definition of the line of authority from top to bottom; recognition of line of authority
(workers must know who to give them orders and initiate action).
 Delegation: letting go off some authority and vesting them in the subordinate; creating new accountability.
 Span of control: manageable number of people to supervise within the same area of specialization
 Chain of command: number of layers in an organization from top to bottom.
 Unity of Command: each employee shall have one supervisor giving instructions to avoid conflicting
instructions and confusion.
 b) Transport organization (Cont’d..)
b) Behaviour school: define the social environment that stimulates people to
strive for the overall objectives of the company rather than their individual
objectives which may be in conflict. Behavior school aims to
 Achieve the company objectives while satisfying people who are part of the company.
 Encourage high productivity and low absenteeism as people are encourage to work hard
 Enhance collaboration between managers & workforce everybody is pulling in one
direction.
 The motivational theory behind this school:
 Every person has an idea of what s/he is at present
 What s/he would like to be in future
 How s/he fits into the world around them
 Maslow hierarchy of needs
Abraham Maslow Hierarchy of needs
 b) Transport organization (Cont’d..)
c) System school: focuses on decisions that should be made to achieve the
organization objectives.
 Policies are made and actions are taken through the decision-making process, and this
process affect the future success or failure of the company.
 The decision making process depend on information and communication, hence the
organization is build from an analysis of information needs and communication
networks
 Steps for the system approach to organization:
 Specify the objectives
 List the sub-systems or decision areas
 Analyse the decisions areas
 Design the communication channels
 Group decision areas to minimize communications burden
Organization structure of Transport Company
Transportation vehicle /assets

Transport operations
• Storing of incoming goods Marketing and
• Offloading distribution activities
• Dispatching of outgoing goods
• Consolidation & loading of Place utility
freight
Time utility

Transport take goods/ people from outside

environment, collect them together to form loads,
deliver them to another place and release them out
into the environment safely Open system
Transport must grow and survive in
the ever changing environment
 Open system of transportation

Cargo/
Cargo/ Cargo/ Cargo/ Cargo/
passenger
passenger passenger passenger passenger
procuremen
processing loading Transport Unloading
t
 Activities in a transport Company
• Policy: plans the implementation of company objectives. Consist of
board of directors,
• Planning: providing the information to make decision and collecting
the relevant information
• Action: implementation of business activities
• Control: checking on the effects of any policy decision on the
company objectives and performances.
 Management Functions and Policy Formulation
• Management: co-ordination of all resources through the process of planning,
organizing, leading and controlling in order to attain the stated objectives.
• A manager has influence on:
• The people
• The work and the structure
• The systems and procedures
• Seven tasks of a manager:
• Managing following set objectives
• Handle risk analysis activities in the transport industry
• Make strategic decisions concerning the future of the organization
• Responsible for setting up working team that can satisfy the demand of the organization.
• Able to handle and communicate information in the industry
• Know every aspect of the organization (appreciating the business as whole)
• Knowledge of all external and internal factors affecting the transport operations world wide.
 Functions of management
Planning
• This function lay down the guidelines for action within the organization and
serve a signposts for the organization progress towards the fulfilment of its
objectives.
• attempts to answer the questions of what is to be done, when, and how
• Planning, therefore, involves selecting the best course of action from the
alternatives available. This requires assessing the outcome of different course
of action.
 Why transport planning is needed?
• Corporate planning is a systematic approach to clarifying corporate
objectives;
• Involves making strategic decisions & checking progress towards objectives.
Three factors relevant in transport planning:
a) Advancement in technology
• Causes obsolescence of transport vehicles
• Increases productivity, reduced costs and competitive price structure
• Shorten lifecycle of infrastructure
• Strategic decisions are made for a company to survive
• Create a prestigious image & less costly service, hence premium is at
forefront of new developments.
• long term planning accommodate technological changes successfully
&make financial provision.
 The need for transport planning (Cont’d..)
b) Complexity in Business
• Resulting from technological change and trends toward larger organization
• Development leads to greater specialization
• Vehicles and services become more specialized, which is difficult to find
employment for equipment outside a specific market sector
• Long term plans ensure that vehicles & services match the requirements of the
consumers in the specialist market they operate.
b) Growing competition
• Shipping companies negotiating over contracts & rates with small cargo shippers
• Prices in the market is influenced the number of shippers in conjunction with amount
of cargo on offer
• Government interference, vertical & horizontal integration of large multi-national
companies
• Change in competition on one mode may balance competition between modes
• Competition requires continuous planning for a company to survive in the future.
 Difference between Transport Policy And Planning
• Transport policy deals with the development of a set of propositions that are
established to achieve particular objectives relating to social, economic and
environmental development, and the functioning and performance of the
transport system.
• Transport planning deals with the preparation and implementation of
actions designed to address specific problems.
• The goal of transport policy is to make effective decision concerning the
allocation of transport resources, including the management and regulation
of existing transportation activities.
• Transport policy can be a public and private initiative, but governments are
often the most involved in the policy process since they either own or
manage many components of the transport system and have levels of
jurisdiction on all existing transportation modes.
 Policy formulation
Policy formulation:
• What business is the company running?
• What business can the company run in the future?
• Looking into the future and deciding what market sector the
company will aim to serve
• Objectives of corporate planning:
• Enable business to survive in a competitive environment by
introducing new methods of operation, new services and new
technologies
• To make profit and invest in new services
• To guide the direction of the company
 The Plan
Factors that made up a plan:
• What course of action the company will take on research and forecasts
which helps to implement objectives and direction to follow
• How resources are obtained, utilized and allocated during the life of
the plan
• Responsibilities of the manager in relation to the various aspects of the
plan enabling each manager to work towards common objectives
• A complete structure of the plan detailing when each phase must be
implemented and completed, providing guidance for management,
• A projection of the incidence of cost for each phase in total and for
each group
 Three distinct levels of planning
• Strategic: set the overall objectives of the company and highlights new
opportunities

• Tactical: sets out the use of resources within the company

• Operations: lays out in detail what each section of the organization must
do to fulfill the organization objectives.
• Split the overall objectives into assignments for various groups and
gives guidance through setting of standards by which performance is
measured.
 Other Functions of management
Organizing
• Dividing transport activities into manageable tasks
• Determine the specific activities necessary to accomplish the objectives of the organization,
• Grouping activities according to the logical pattern
• Assigning a person to carry out the activities
Implementation
Implementation is the carrying out, execution, or practice of a plan, a method, or any design
for doing something. Implementation is the action that must follow any preliminary thinking
in order for something to actually happen.
Monitoring and Control
• Continuously monitor the performance of the work
• Laying out standards of performance and measuring the actual performance against the
standard.
• Investigate any variance and correct the performance to match the standards or set new
standards.
 Management in Transport
• Managing transport fleet may be different to management of other businesses
• Great deal of delegation of tasks
• The workforce may spend a lot of time away from office (supervision) and
may have to implement initiative, especially in unplanned situations
• Procedures are laid down to help transport operators complete their journey
successfully and in line with company objectives and allows management to
exercise control over their workforce.
• Supervision is achieved by keeping records and comparing the records with
the standard set.
• Procedures also help to train the transport operators in carrying out their tasks
in an efficient and trustworthy manner
• Log of actions taken during the journey.
 Management in Transport (Cont’d..)
• Define the job descriptions of the crew, checking competence levels and selection of the
crew
• Defining vehicle specifications for the task in hand
• Setting out authorization levels and organizational requirements of the crews
• Setting performance targets and defining performance indicators
• Understanding the health and safety risks involved in the proposed journey and
communicating to the crews.
• Supervision of the crew:
• Setting instructions for the intended journey
• Checking availability of transport means and crews
• Checking the authorization for the intended journey
• Checking authorization of crews and transport means
• Monitoring performance and providing the first line of feedback to the management
• Ensuring provisions of the crews’ needs on the journey
• Reinforcing the need for a good operator’s Behaviour.
 Management in Transport (Cont’d..)
• Responsibilities of the crews:
• Planning the journey in the light of the likely hazards which might be
encountered
• Taking the responsibilities of the means of transportation (vehicles) at all
times they are away from the depot
• Ensuring they understand the management and supervisor’s expectation
• Providing feedback to supervisors at the end of the journey
 References
• Gubbins, E. J. (2003). Managing transport operations. Kogan Page
Publishers.
• http://nrsc.org.na/
• www.lac.org.na/laws
 13 Storch Street T: +264 61 207 2597
Private Bag 13388 E: ekalipi@nust.na
Windhoek W: www.nust.na
NAMIBIA

Faculty of Management Sciences

Thank You.